Insurance, Worldwide, is one of the most potent financial sectors. The risks are inevitable being an indispensable part of human life and cannot be thrown out of life, hence the risk management and risk transfer become one of the basic requirement . The Insurance is the only answer to the solution.
The next milestone in the path of development of the industry was initiation of life insurance. The Life Insurance Corporation (LIC) was established on 1.09.1956. The Industry further draws the attention of Indian Government and Insurance Regulatory and Development Authority (IRDA) Act, 1999 was implemented, which further leads to foundation of Insurance Regulatory and Development Authority to safeguard the interests of policyholders as well as to regulate, promote and ensure orderly growth of the insurance industry and for matters connected therewith or incidental thereto.
A new era begins for the Indian Insurance industry when the Insurance Regulatory & Development Authority invited the applications for registration as insurers in August, 2000. With the liberalization and opening up of the sector to private players , the industry turned to be a shining segment of the economy, promising golden prospects for tomorrow.
The insurance sector plays a very vital role in the process of economic development of any country. It acts as mobiliser of savings, as financial intermediary, as promoter of investment activities, as stabilizer of financial markets and as a risk manager. Insurance services lead to efficient and productive allocation of capital resources, facilitate growth of trade and commerce, substitute for governments social security programmes, and assist individuals and firms in efficient management of risks. The liberalization phase of the Indian economy has come a long way over the last decade. Though there have been hick-ups during this phase we have seen a movement towards market and customer oriented approach in every sector with insurance sector being no exception. Globalization will certainly increase insurance penetration and all members should equip themselves to exploit the opportunities offered by this sector.